An integrative model of narrative identity builds on a dual memory system that draws on episodic memory and a long‐term self to generate autobiographical memories. Autobiographical memories related to critical goals in a lifetime period lead to life‐story memories, which in turn become self‐defining memories when linked to an individual's enduring concerns. Self‐defining memories that share repetitive emotion‐outcome sequences yield narrative scripts, abstracted templates that filter cognitive‐affective processing. The life story is the individual's overarching narrative that provides unity and purpose over the life course. Healthy narrative identity combines memory specificity with adaptive meaning‐making to achieve insight and well‐being, as demonstrated through a literature review of personality and clinical research, as well as new findings from our own research program. A clinical case study drawing on this narrative identity model is also presented with implications for treatment and research.